Hyperfine, Inc.

Good afternoon and welcome to the Hyperfine Quarter 1, 2026 earnings call. I am Franz and I'll be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to redraw your question, Press star one again. Thank you. I would now like to turn the call over to Webb Campbell with Gilmartin Group. Please go ahead.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter ended March 31st, 2026. A copy of the press release is available on the company's website as well as sec.gov. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws and made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends and future financial performance, expense management, market opportunity, commercial and international expansion, regulatory approvals, and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of these risks and uncertainties associated with our business, please refer to the risk factors section of our latest periodic filing with the Security and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of today's live broadcast. Hyperfine Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon, and thank you for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hadle. The first quarter was a strong start to 2026 as we executed across our commercial and financial priorities. We delivered revenue of $3.9 million, our second highest quarter ever, up 83% year over year. Q1 was our third full quarter, selling our next generation subsystem in the U.S. market and selling into our new neurology office business. We posted a 51% gross margin and demonstrated operating leverage and spending discipline closing the quarter with a strong balance sheet. We also achieved several important milestones. We obtained CE and UKCA marks for the next generation subsystem and our advanced DWI Optive AI software. We significantly increased enrollment in our contrast PMR study and now sit at over 50% of our enrollment goal. We launched our advanced DWI Optive AI software at the 2026 International Stroke Conference supported by a paper published in SIN demonstrating the subsystem's enhanced stroke detection capabilities. And lastly, we saw compelling data from our neuro PMR study presented at the American Society of Neuroimaging highlighting broad clinical utility high diagnostic value, and a strong patient preference with the subsystem in neurology offices. With our strong execution in the first quarter across revenue growth margin, cash burn, and milestones, we are reiterating our guidance to deliver transformative growth, healthy margin expansion, and lower cash burn for hyperfine in 2026. Commercially, Demand for the next generation subsystem remains strong, and we continue to diversify revenue across our three business verticals. Hospitals, including health systems, neurology offices, and international markets. I will now walk through updates from our three business verticals in more detail. In our hospital business, we're driving sales of our next generation subsystem with high interest from adult and pediatric critical care and emergency departments. We are also leveraging positive clinical and economic impact data from early adopters to expand our footprint and increase utilization across sites of care in the hospital. Programs launched since the introduction of our next generation system have demonstrated high utilization and positive clinical and economic outcomes. Strengthening our full hold in the hospital, at the International Stroke Conference in February, we launched our Advanced DWI Optive AI software, extending our value in stroke workflows to the ED and across hub and spoke networks. The Advanced DWI Optive AI software is now implemented in most scanners across our installed base. We continue to advance our health system and IDN strategy and are seeing repeat sales within IDNs across multiple sites over the last couple quarters. Our pipeline continues to shift towards multi-unit and IDN opportunities. The leverage from selling into IDNs is a key part of our strategy to drive adoption of our technology across hospitals. These strategic accounts represent attractive expansion opportunities that have longer sales cycles with additional system-wide stakeholders and steps in their procurement processes. In our office business, placements were a solid contributor to our revenue performance this quarter And following strong exposure and market activation work at the American Society of Neuroimaging and Neuronet meetings in Q1, we have had mostly next-generation sleep system placements in larger offices. We continue to build a healthy pipeline across practices of varying sizes. Also, during the first quarter, data from NeuroPMR was presented at the American Academy of Neuroimaging. In neurology offices for neuro-PMR, the subsystem was used for patients across several neurological conditions, including headaches, dementia, multiple sclerosis follow-up, and tumor follow-up. The study shows the high diagnostic value of the subsystem in this setting, and the patient experience with the subsystem was rated very favorably compared to conventional MRI. Turning to our international business, in Europe, our Optiv AI software was launched during the quarter and is seeing strong reception. In India, the first Duke system is now live in clinical use at a leading KOL center in Delhi through our distribution partner. Additionally, we're very excited to have received CE and UKCA marks for our next generation subsystem with the latest version of Optiv AI software. We're working to complete all translations and documentation processes to be in a position to launch in Europe in the third quarter. This has positioned us for a stronger second half of 2026 international. Looking ahead, we remain committed to increasing the clinical value of the subsystem through technology, innovation, and clinical evidence. We plan on introducing the next software upgrade with additional improvements in image quality and clinical capabilities by the end of 2026. Driven by clinician interest, we are also evaluating and conducting pilot activities in new sites of care for our subsystem. namely the use of the subsystem in the operating room or angiosuite to support timely scanning of patients following procedures, as well as the use of the subsystem on mobile units for community-based brain screening programs. Finally, I would like to provide an update on our contrast PMR study. I'm happy to share that enrollment is progressing well with three study sites now active and enrollment over 50% of target. Over the long term, we believe expanding the subsystem indications for use to include contrast is of value in all types of care as it drives increased clinical utility. Brain scans with contrast represent a meaningful percentage of all brain MRIs. As a reminder, The contrast PMR study is a prospective multicenter clinical study designed to evaluate the feasibility and visualization benefits of contrast-enhanced ultra-low-field portable MRI. We currently expect the study to support a potential FDA submission by the end of 2026 to expand the subsystems intended use to include gadolinium-based contrast agents. Also, a contrast indication can further support the office opportunity as cases in offices are all elective and use CPT codes for reimbursement. As a reminder, brain MRI exams with contrast are reimbursed using a dedicated CPT code 70553. And very pleased with the strong market traction we continue to generate and the level of image quality the subsystem provides. I'm proud of the Hyperfine team's execution, not only in the last quarter, but over the last two years, delivering numerous milestones to get to this point. We continue to see our business progressively strengthening through the year, and I remain confident in our commercial traction, pipeline, and opportunity. With that, I will turn the call over to Brett to review our financial performance and guidance.

Thank you, Maria. I will recap our financial results for the first quarter of 2026 before providing an update on our guidance. Revenue for the first quarter of 2026 was 3.9 million, compared to 2.1 million in the first quarter of 2025, representing an increase of 1.8 million, or 83% year-over-year. In the first quarter, we sold 10 units versus six units in the prior year period, with contributions across all three business verticals. The majority of unit sales were our next-generation system, supporting a strong average selling price. Gross profit for the first quarter of 2026 was 2.0 million compared to 0.9 million in the first quarter of 2025. Gross margin was 50.7 percent compared to 41.3 percent in the prior year period, representing approximately 940 basis points of gross margin expansion. This is the third straight quarter with gross margin exceeding 50%, and we believe we are well positioned for meaningful margin expansion as we scale. RMB expenses for the first quarter of 2026 were 3.8 million compared to 5.0 million in the first quarter of 2025, a decrease of approximately 24%. We continue to realize the benefits of the reorganization completed in the first quarter of 2025 as we transition to a commercial growth stage organization. Sales, general, and administrative expenses for the first quarter of 2026 were 6.7 million, flat compared to the first quarter of 2025. We continue to operate with one U.S. sales team covering both the hospital and office market opportunities and are focused on driving sales productivity and operating leverage. Net loss for the first quarter of 2026 was 8.6 million, equating to a net loss of 9 cents per share. compared to a net loss of $9.4 million, or 12 cents per share, in the first quarter of 2025. The first quarter of 2026 net loss included a $0.2 million loss from a non-cash change in the fair value of warrant liabilities, compared to a $1.6 million gain in the first quarter of 2025. Net cash burn excluding financing in the first quarter of 2026 was $8.8 million, compared to 10.1 million in the first quarter of 2025, an improvement of 1.3 million, or approximately 13%. The first quarter is typically our highest cash burn quarter during the year due to several annual one-time payments, such as annual bonus and insurance. Reducing our cash burn remains a significant focus, and we will continue to prioritize spending discipline and improve operating leverage in 2026. As of March 31st, 2026, we have $40.8 million in cash and cash equivalents on our balance sheet. This cash balance is inclusive of the $15 million initial tranche under the up to $40 million long-term debt facility put in place during the first quarter. In addition to the $15 million initial tranche, we have the option through the end of 2027 to access additional tranches totaling up to $25 million upon achievement of prescribed commercial targets. Now turning to guidance. We are pleased to share that we are tracking well to achieve our financial outlook for the year, and we are reiterating those growth and margin plans today. We continue to expect revenue between 20 and 22 million, representing year-over-year growth at the midpoint of 55%. Our pipeline remains strong across our three business verticals, including several multi-unit hospital and IDN opportunities, and the second half 2026 launch of our next generation swoop system in Europe. We continue to expect revenue to progressively strengthen through 2026. We continue to expect gross margin to be in the range of 50 to 55% for the year. We expect gross margin to improve over the course of the year as sales volumes increase and expect second half gross margin percentages to exceed the first half. we remain optimistic that we can sustain gross margins above 50% as we execute on our growth initiatives. We continue to expect total cash burn to be in the range of $26 to $28 million for the full year 2026, representing a 10% year-over-year decline at the midpoint. This cash burn guidance includes our quarterly debt interest payments of approximately $400,000. We will continue to be disciplined with our spending while investing in commercially-oriented projects and initiatives. Lastly, we continue to see a healthy cash runway extending into 2028, reflecting the strength of our balance sheet and our continued focus on operating leverage and disciplined capital management. This cash runway expectation is inclusive of the $15 million initial tranche of debt financing but exclusive of the additional $25 million of growth capital available under that facility. We remain committed to spending disciplines while investing in our highest priority commercial, clinical, and technology initiatives as we scale. We believe we are executing upon an important phase of growth supported by a strengthened financial profile and a commercial stage operating model. We are positioned as a de-risked medical imaging platform with multiple durable growth catalysts across large, underserved sites of care, supported by a compelling value proposition, robust pricing, attractive gross margins, and improving sales productivity and operating leverage. I will now turn the call back to Maria for closing comments.

Thank you, Brett. Before we open the call for your questions, I want to take a brief moment to reflect on our progress. It has been just under one year since we received FDA clearance for our next-generation subsystem and Optis AI software. And in these three commercial quarter scenes, we have meaningfully improved our revenue and margin profile, entered new markets, and continue to innovate. I'm proud of what the team has accomplished, and we remain energized by the opportunity ahead as we expand access to brain MRI across hospitals, neurology offices, and international markets. With that, we're happy to open the call to your questions.

Operator?

Thank you. And we will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to join the queue. If you would like to redraw your question, simply press star 1 again. Participants may ask one question and one follow-up during their turn and can just simply join the queue again after that. Thank you. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of Frank Takinen from Lake Street Capital Markets. Please go ahead.

Hey, this is Nelson Cox on for Frank. Congrats on all the progress and for taking the questions. Maybe just starting with the IDNs and the multi-unit ordering a bit more. Can you maybe talk a little bit more about the typical decision criteria and timelines you're seeing there and how many of these IDN conversations are at that standardization stage versus kind of the single site pilots? And then is there some assumption in guidance of these single site pilots standardizing deeper in 2026 or how are you? Yeah, how's that?

Sure, Nelson. I'll take a crack at it and Brett can add any commentary. So again, remember, we have only had the next generation subsystem for three quarters. So our history with it and the idea and strategy is about three quarter deep. I can tell you there is an IDN that has moved from the first to multiple in one site to a second site and to a third site. The rest of the conversations are in the beginning of the first site doing the initial or initial placements before they go system-wide. We have an appreciation of the process which is slightly more involved than a single hospital process in that there is either a regional or a divisional or a national sort of level of approvals and procurement steps that need to be fulfilled and we expect then once we land the first systems, similar to what we have experienced already, it takes implementation plus probably two, three months worth of data before the rest of the sites that are interested are going to be moving forward with their own procurement processes. We do have visibility to multiple sites within an IDN, so it's not that we need to start the selling process, but we are not going to be able to start the procurement process with the additional sites within an IDN until the first one goes through that implementation and initial data collection for about, call it, eight weeks or so by the time this data gets tabulated and shared across the IDN.

Okay. That is helpful. And then maybe, yeah.

I was going to comment on your question about the guidance and what, you know, is baked in there. So, for our 2026 guidance, it reflects really As we mentioned in the last call, the three initiatives and growth factors of the business, so the hospital, which includes the IDN, includes the office business, international, all of them are contributing towards the growth that we see in our 2026 guidance. I will highlight that, as Maria mentioned, given when we got clearance for the next generation system, we see the second half of the year being more lined up for budgetary cycles, especially for these IDN initiatives.

Okay, that's helpful.

And then maybe on the office, can you help us think about the profile of your adopters there so far and maybe some encouraging signals you've seen? I know you mentioned a healthy pipeline across varying sizes, but maybe talk about what's resonating within the larger offices more specifically, and then whether that and how that pipeline and smaller practices maybe varies.

Sure, I'll start with that as well, Nelson. So I think we said in the prepared remarks, we were predominantly placing second generation system in larger offices. Remember the larger offices are usually grouped under an organization called Neuronet and their meeting annually is in the month of February. So we got some very good leads and interest out of that meeting that translated into deals in the first quarter. The Neuro PMR data with the multiple sort of utility of the subsystem resonates very well because at the end of the day, the more utility they see across their patients, the easier it is to justify the investment and see the return on investment with bringing in this as an ancillary business, ancillary activity to their practice. By definition, a single practitioner practice has lower volume and often has either a little bit of specialization or a little bit of everything but has less resources. So I think over time we're going to see that it is the larger offices that are going to have the volume that makes the investment attractive, the investment actually translating to an attractive return and an attractive additional business. Brett, I don't know if there's anything else you would like to add.

No, I think you've covered it well. Okay, I'll stop there. Thank you, guys.

Sure. Thanks, Aslan.

And your next question comes from Yunzhi from B. Riley Securities. Please go ahead.

Thank you for taking our questions. Maria, can you comment on what you are hearing related to the helium shortage in the U.S.? ? and whether that impacted your interactions with potential customers recently.

Thank you, Yuan. So remember, our system does not need any helium, and it is not something, and to a certain extent, we always talk about our system being light in terms of maintenance requirements, both from a complexity as well as the cost. so we make sure people understand that our system is helium-free. So I know it has been in the news, but I haven't really heard it very directly from any of our customers. We often hear our customers talk about some of their challenges with high-field, so any customer that may have just one high-field magnet, we often hear the pain point if they are either replacing it or it's down for maintenance. how our system comes in very handy in those times, but there hasn't been really much of a surge in the noise level around helium availability that I have heard. Brett, I don't know if you have anything else to add.

No, I think you highlighted, I mean, being helium-free, being able to be plugged into a standard wall outlet, being portable, no shielding, siding construction, all of those have been kind of elements that we've been highlighting throughout the years. Obviously, in the recent news flow about the helium shortages, that just kind of amplifies that, but it's been part of our overall thesis as we talk to hospitals and sites.

Got it, got it. I'm learning from the recent use case from the recent stroke care seminar. When your team sells soup to a new customer, what are the key economics, the numbers that you want to highlight, such as the ROI, the backup options, or freeing up capacities, those main characters that you want to highlight?

Sure. So I'll start there. So starting with the strokes use case, the most important piece of data that helps our potential customers understand How valuable this is, is the wait time in stroke-suspected patients for an MRI. So there is a bit of a joke that we make around the spreadsheet, which is for these patients that came into an ED with symptoms of stroke, how many hours did it take you to be able to get them into the MRI? And unfortunately, those numbers with high field are ridiculously high. sometimes 60, sometimes 80, sometimes 40 hours. So the number one is, okay, how much shorter can we make that? And that builds a very strong case for the economics in the ED and the faster triage. That was also what the PRIME study wanted to do out of Yale, which is all commerce in the ED. How much faster do you get a patient that MRI that is needed to understand why they are there? We then add to that the use case and the economic value in the ICU. That's all about cost savings. So then we actually challenge people to run the numbers on how much they spend on tubing, pumps, MRI-compatible things that they need to feed a patient so that they can safely go to a high-field MRI. And the shortening of the time to MRI plus the savings on those MRI-compatible supplies very quickly build up this case for a one-to-one-and-a-half-year ROI that we have discussed, even with our current MSRP of 590,000. Got it.

Yeah, that's very helpful.

I will hop back on the queue. Thank you. Thank you, Yuan. And your next question comes from the line of Marie Tybalt from VTIG.

Please go ahead.

Good afternoon, Brett and Maria, and congrats on the progress here. I wanted to ask quickly about contrast PMR. Really pleased to hear the progress with the trial there. Wanted to understand what you think the impacts of having that gadolinium contrast will be on adoption for the hospital and office channels. And I guess another way of asking it is, you know, how often are purchases getting put off because the doctor says they want to wait for the contrast indication?

Great question, Marie. Thank you. So I would say I can't think of any case in a hospital environment where the purchase has been put on hold awaiting contrast. I will definitely say there is a lot of excitement from both sides of care, the office and the hospital, for the use because it is a substantial number of scans that they do with and without contrast. What I am most interested in, and I know we shared with you the recent webinar, there was a question to one of our thought leaders, and it was Dr. Fabrizio from Jefferson Abington. And the question was, do you only use soup when the other is not available, or do you just use soup? And I think her answer was, no, we just use it. So I want to drive to a point where they can trust this device to cover everything. most of their cases. And today they have to do it off-label if they want to use contrast in the hospital environment. So it increases the utility. The increase of utility is going to make the multiple systems clearly more needed because sharing the systems is going to be more challenging. And it's going to be more a reflex from a workflow where there are fewer cases that they cannot do with our system. In the office, it clearly also has an economic element where I believe adding the contrast cases at a higher reimbursement rate, which is somewhere between 30% to 50% higher, will also change the economic sort of calculation as to how many cases they need to do for how long before this thing turns into into a green business for them. Does that make sense?

It does. That's a great amount of detail. I really appreciate it. I'll use my follow-up here to try to dive in a little bit more on what you hinted at in terms of new sites of care in the hospital, things like the operating room and the angio-suite Are there new accessories, new sequences, new indications, anything that you're needing to be able to move into that? And any timelines, even very general, might be helpful for us. Thanks so much for taking the questions.

Sure, thank you. And thank you for asking because it is really exciting to see the surge in interest from surgeons and interventionalists in the neuro space to bring the subsystem into their environment. We will see this year publications and presentations of single cases and small case series from some of these pioneering sites that have already brought it in for what I would call the immediate post-procedure imaging of the patients with significant benefit across a number of cases. We are assembling also an advisory group and we We would like to exit this year with a plan that really answers the first part of your question, which is exactly, is it all in the software? Is it probably in the coil, which is just a piece of the hardware, or does it take more? Think about sort of the cranial access. If that needs to be happening while the patients are in the scanner, there may be some adjustment to the coil. That's only one component, so that's not quite an accessory. It's a modification of the hardware, but it is going to be the result of the exposure of these initial cases, case series, as well as the work we're going to do with our initial advisors that will form really a plan for us by the end of this year, and I think think there are cases where the surgeon is already driving the purchase in a hospital for that immediate safe post-operative scanning in the OR. If we want this to be more incremental, it's probably going to take us thinking about how how there could be something on the either preoperative or intraoperative, and that definitely will take a little bit more work, and I will know more probably in the next couple of quarters.

Very interesting. We look forward to hearing about it.

Thanks so much. Thank you. There are no further questions at this time.

And I would now like to turn the call back over to Maria Sainz, for the closing remarks. Please go ahead.

Thanks, everyone, for joining us today. We look forward to continuing to update you on our future progress and have a great rest of your days.

Ladies and gentlemen, thank you all for joining, and that concludes today's conference call. All participants may now disconnect. Thank you.